Press review - page 545

[Sergey Golubev]

Weekly Fundamental Forecast for Dollar Index (based on the article)

Dollar Index - "The US Dollar finds itself torn between the influence of speculation about Federal Reserve monetary policy and swelling geopolitical risk. This ought to make for a volatile week ahead critical economic news-flow comes across the wires against a backdrop of simmering tension between the US and North Korea. Sizing up scheduled event risk, minutes from July’s FOMC meeting take top billing. As ever, traders will be keen to gauge the level of confidence in policymakers’ standing projection – last updated in June – for three interest rate hikes in 2017 (of which two are already in the history books)."

[Sergey Golubev]

Weekly Fundamental Forecast for GBP/USD (based on the article)

GBP/USD - "The British Pound is often seen, like the US Dollar and the Euro, as neither a safe-haven currency to be bought when investors are nervous nor a ‘risk-on’ currency to be acquired when their risk appetite increases. However, this broad generalization, like most, needs to be questioned. As for Brexit, little is happening right now as many UK politicians remain on holiday. Note, though, that Michael Saunders, one of the two hawks on the Bank of England’s monetary policy committee currently voting for a rate rise, was reported Friday as saying that the UK’s exit from the EU meant the economy would probably grow more slowly in the coming years than it would otherwise have done."

[Sergey Golubev]

Weekly Fundamental Forecast for USD/JPY (based on the article)

USD/JPY - "The big driver for the Yen has appeared to be one of risk aversion. On Tuesday, around Noon Eastern Time, U.S. President Donald Trump sent a tweet that triggered fears around the U.S. stand-off with North Korea regarding the DPRK’s nuclear ambitions. Shortly after this tweet was sent, risk assets like the S&P 500 and the Nasdaq 100, as well as Nikkei futures began to dip-lower. USD/JPY mirrored this movement, as Yen strength began to show and continued through the week and into Friday. The logic for why this correlation exists and why it played out this way is fairly logical: With the Bank of Japan being one of the ‘more dovish’ of the major Central Banks, the expectation is for the BoJ to remain pedal-to-the-floor with stimulus well into the end of Haruhiko Kuroda’s tenure next April."

[Sergey Golubev]

Weekly Fundamental Forecast for AUD/USD (based on the article)

AUD/USD - "The sole obvious likely market mover is official employment release which will come on Wednesday. Even that is likely to have a binary and probably transitory impact on the currency; good numbers will mean Aussie gains, poor ones will see it slip. Next week therefore is more likely to be about the background than the economic foreground as far as the Australian Dollar goes. That means investors will have one eye on global risk aversion and another on the Reserve Bank of Australia."

[Sergey Golubev]

Weekly Fundamental Forecast for NZD/USD (based on the article)

NZD/USD - "The Reserve Bank of New Zealand (RBNZ) left monetary policy unchanged at governor Graeme Wheeler’s last monetary policy meeting on Thursday. The governor left rates unchanged at 1.75% but said that a lower New Zealand dollar is needed to “increase tradables inflation and help deliver more growth.” This comment, coupled with the closing “monetary policy will remain accommodative for a considerable period” sent the Kiwi lower and back to levels last seen over one month ago. The governor who is set to leave on September 26 also said in comments to a parliamentary committee that currency market intervention to weaken the NZD is “always open to us.”"

[Sergey Golubev]

Weekly Fundamental Forecast for USD/CAD (based on the article)

USD/CAD - "The Bank of Canada (BoC) may adopt a more hawkish tone as consumer prices are anticipatedto pick up in July. It seems as though the BoC will look through the recent weakness in the CPI as ‘the factors behind soft inflation appear to be mostly temporary,’ and Governor Stephen Poloz and Co. may prepare Canadian households and businesses for higher borrowing costs as ‘the output gap is now projected to close around the end of 2017, earlier than the Bank anticipated in its April Monetary Policy Report (MPR).’ As a result, the shift in USD/CAD behavior may continue to unfold in the second-half of the year as the BoC appears to be on course to further normalize monetary policy over the coming months."

[Sergey Golubev]

Weekly Fundamental Forecast for USD/CNY (based on the article)

USD/CNY - "Chinese equities have already taken the hit, with Shanghai Composite Index and Shenzhen Component dropping -1.64% and -0.67% respectively on a weekly basis; Hong Kong stocks lost more, by -2.46% over the same of span of time. These shares could sink further if Washington and Pyongyang continue to exchange belligerent statements next week."

[Sergey Golubev]

Weekly Fundamental Forecast for S&P 500 (based on the article)

S&P 500 - "The dominating theme next week will be how markets react to the heightened tensions between the U.S. and North Korea. We saw a bit of ‘risk-off’ last week, will we see more headlines impacting investor appetite for stocks in the week ahead? On the data-front, we have Advance Retail Sales for July on Tuesday and then the next ‘high’ impact data event isn’t until Friday when we get UofM Confidence for August."

[Sergey Golubev]

USD/JPY Intra-Day Fundamentals: Japan Gross Domestic Product and range price movement 

2017-08-14 00:50 GMT | [JPY - GDP]

• past data is 0.3%
• forecast data is 0.5%
• actual data is 1.0% according to the latest press release

if actual > forecast (or previous one) = good for currency (for JPY in our case)

[JPY - GDP] = Change in the inflation-adjusted value of all goods and services produced by the economy. 

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From rttnews article :

• "Japan's gross domestic product advanced 1.0 percent on quarter in the second three months of 2017, the Cabinet Office said in Monday's preliminary reading."
• "On a yearly basis, GDP surged 4.0 percent - again topping expectations for 2.5 percent and up from the upwardly revised 1.5 percent jump in the first quarter (originally 1.0 percent)."

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USD/JPY M5: range price movement by Japan Gross Domestic Product news event 

[Sergey Golubev]

USD/CNH Intra-Day Fundamentals: China Industrial Output and range price movement 

2017-08-14 03:00 GMT | [CNY - Industrial Production]

• past data is 7.6%
• forecast data is 7.2%
• actual data is 6.4% according to the latest press release

if actual > forecast (or previous one) = good for currency (for CNY in our case)

[CNY - Industrial Production] = Change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities. 

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From marketnews article :

• "China's industrial output growth slowed sharply in July following a sharp increase in June, an indication that the country's economic growth is slowing. Industrial output grew 6.4% on an annualized basis, well below the 7.6% growth rate in June, while still above the 6.0% growth rate recorded in July 2016, the National Bureau of Statistics (NBS) said Monday. The July industrial output growth rate was the lowest since the January-February period this year."
• "The industrial output situation is still better than last year, and the steady-to-good economic conditions have not changed," Zhang Yiping, the analyst at China Merchant Securities said on Monday. "It was overly-enthusiastic sentiment in the market that caused excessively high expectations which belittles the growth of industrial output."

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USD/CNH M5: range price movement by China Industrial Output news event